How Does a Payment Processor Work?

Payment Processors enable Merchants to receive Debit or Credit Card payments by providing a connection to an acquiring bank.  These processors perform many functions such as evaluating whether transactions are valid and approved, and using anti-fraud measures to assure that a purchase transaction is initiated by the source it claims to be. Processors are held to standards, and regulations organized by credit card associations such as the Payment Card Industry Data Security Standards or PCI-DSS.